With the struggling economy, many people are having trouble paying their monthly bills. If you are one of those people, being late on one payment might not seem significant; however, your creditors will not just ignore your late payment. Making late credit card payments could really damage your credit score. In fact, your credit score could be impacted for years. This is a major reason why their will always be a market for payday loans and lenders that offer short term paycheck loans, which can provide borrowers with the quick financing they may need to cover a bill in between their paychecks.
When you make late payments, you will be charged up to $35 a late fee. Each month your payment your payment is overdue, you will be charged another late fee. These fees can really add up, and your bill will just keep growing.
When you make late payments, your creditors will contact the three credit bureaus. Normally, you need to be at least 30 days late before it is reported, but it will stay on your record for seven years.
Making timely payments is one of the biggest factors when your credit score is determined. If your payment history is poor, your credit score will drastically decline. In some cases, you may have misplaced the bill or just forgotten to pay it. If you normally pay your bill on time, your creditor might forgive a one-time mistake. You should call to ask them to waive the late payment fee.
If your credit card payments are more than 60 days late, your account is considered delinquent. In this case, your creditor could increase your interest rates. Your rate might even increase to the maximum rate that is charged to cardholders. If your rate increases, other fees will also increase, and this will result in very high balances. After a few months of paying your bill on time, your creditor will probably go back to the original rate.
Being 30 to 60 days late on one credit card could have a slight impact on your score; however, the damage will be minimal. If you are 30 to 60 days late on more than one credit card, the result will be worse. If you are more than 60 days late on any credit card, the consequences to your credit score will be drastic.
It is a good idea to check your credit score regularly. Many people find mistakes on their credit score, so you need to correct any inaccuracies. In order to maintain good credit, you also want to pay off high balances and make timely payments. Credit card bills can get out of control before you realize it, so keep the balances as low as possible.
Late credit card payments will result in higher fees and higher interest rates. This will hurt your credit score, and it will hurt your chances of obtaining new credit. If you start making your payments late, you will get in the habit of doing so, and it will be hard to recover. The best option is just to pay your bill on time, and your credit score will remain acceptable.